lukegilman.com : The Blawgraphy
Life of a Law Student, University of Houston Law Center

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Please note: I'm no longer updating this particular blog, but keep it around for archival purposes. Visit me at the current blog at www.lukegilman.com

Kill the Billable Hour

Evan Chesler, presiding partner at Cravath where he was head of litigation, has rather unsubtly suggested that we all Kill the Billable Hour:

I’m a trial lawyer. I bill by the hour. So do the associates who work for me. I have lots of clients, so I can pretty much work, and bill, as much as I want. This needs to be fixed. Yes, you read that correctly.

I might be more inclined to believe that Chesler was on to something if he didn’t simultaneously brag of his exorbitant rates (“We don’t make numbers public at Cravath, but you can assume I’m not cheap”) and compare his work to that of “Joe the Contractor”.

So what am I proposing? For reasonable periods of time during the life of a lawsuit, say three months at a time, I should do what Joe does: identify the client’s objectives, measure, calculate, build in a contingency and come back with a price. Once the price has been agreed upon, the billable hour should be irrelevant. The client will no longer be surprised by a whopper bill and met by the standard (albeit true) explanation that “litigation is unpredictable.”

The WSJ Law Blog interviewed Chesler in “I’m a Trial Lawyer. I Bill by the Hour . . . This Needs to be Fixed.”

Somewhere, someplace, once upon a time, somebody said to a client, “I’m going to charge you for each hour I spend on your matter.” And that client said, “OK.” And from that a seed was planted, and a tree grew. I believe it’s time to plant new a new seed.

I’ve written on this subject in previous posts, The Death of the Billable Hour, Wishing Does Not Make it So and More on the Billable Hour, Charting Your Own Course

I won’t be holding my breath.

The Gen-Y Albatross

Once a year, just before the OCI season heats up, the 2Ls at UHLC are herded into a classroom, hosed off and made presentable and treated to a presentation by Mary Crane.  Mary Crane believes we are part of the "T-Ball Generation"; among other things this means we:

  • wear questionable attire into the office
  • don’t care when someone suggests we are inappropriately dressed
  • schedule work assignments around opportunities to connect with friends and families
  • ignore the existence of any sort of hierarchy in our respective workplaces
  • have parents who phone HR any time we don’t receive the performance evaluation or merit pay raise our parents think we are due

In other words we’re spoiled, inconsiderate, self-obsessed dilettantes who having become accustomed to an inflated sense of self-worth and exceptionalism now demand recognition for it despite all evidence to the contrary. In my favorite part of this yearly ritual, Mary informs us of the shocking revelation that body piercings, visible tattoos and exotic dye-jobs are not acceptable in most large law firms. Mary honestly believes her advice is all too necessary, that real law students actually do these things, that we must therefore be reminded to do things like remove our iPod earbuds when talking to senior partners. Normally, I would not begrudge Mary her shtick. If there were people out there whom evolution has overlooked who genuinely learn and benefit from this type of advice, so be it. Who am I to judge?

I should have known better. Horrifyingly, more than once in the last few weeks I’ve been interviewed by partners who have referred vaguely to reports that "my generation" is "different." They been lead to believe that we have an insatiable appetite for text-messaging each other throughout the day and though we might appear to be doing some research on WestLaw, we’re surreptitiously updating our Facebook profiles. For some reason we have to be spoken to like mental patients for fear of damaging our delicate psyches. Mary recommends developing a list of open-ended, probing, linked, evaluative questions before providing us feedback. I’m starting to get a glimpse into this mindset from the 60 Minutes segment, The "Millennials" Are Coming. The scariest part is that everyone seems to believe that this behavior should not only be tolerated but accommodated.

So I have something to ask senior partners of a certain generation – did you spend your law school career popping shrooms in the law review basement, grooving to the Grateful Dead, rapping about "The Man" and tie-dying your dashikis? No, of course not, because that’s a ridiculous stereotype conjured by the media to scare old people.

I grew up with plenty of millenials but very few of them made their way to law school or stayed very long if they did. Most of my classmates work long hard hours to get to this point. I am in constant amazement of their talent and perseverance. They’re no different than any other generation of young lawyers, imbued with a recognition of the duties as well as the rewards of the profession. They’ll make you proud if you give them the opportunity.

Public Interest Lawyers – Thank You for Not Being Evil

I had to laugh at this April 1st article from the Harvard Law School Record, School Holds “Thank You For Not Being Evil” Ceremony:

As part of its continuing campaign to encourage students and graduates to pursue careers in public interest, the law school held a “Thank You For Not Being Evil” ceremony last Wednesday recognizing graduates who chose to take jobs with employers who are not primarily dedicated to destroying weaker businesses, poor people, or the environment.

“You,” Dean Kagan told the assembled crowd, “are exemplifying what this law school is all about: not actively working to make the world a worse place. You should be proud of yourselves for bucking peer pressure and institutional inertia and instead making a courageous choice to live up to your own ideals and the bare minimum standards of human decency.”

Ah ha, ha, ha…… it’s funny cause it’s true. No really.

Stephen Bainbridge of UCLA takes Erwin Chemerinsky, the inaugural dean of the new UC Irvine Law School in Erwin Chemerinsky: A Law School for the 21st Century:

You want to help make society a better place? You want to eliminate poverty? Become a corporate lawyer. Help businesses grow, so that they can create jobs and provide goods and services that make people’s lives better.

Those whose livelihood depends on corporate enterprise cannot be neutral about political systems. Only democratic capitalist societies permit voluntary formation of private corporations and allot them a sphere of economic liberty within which to function, which gives those who value such enterprises a powerful incentive to resist both statism and socialism. Because tyranny is far more likely to come from the public sector than the private, those who for selfish reasons strive to maintain both a democratic capitalist society and, of particular relevance to the present argument, a substantial sphere of economic liberty therein serve the public interest.

I took another look at Chemerinsky’s post A law school for the 21st century for the offending condemnation of corporate lawyers -

Using law to help people and society is neither liberal nor conservative. It is about the duty of every lawyer to use his or her training for the social good. Law schools must instill this throughout the curriculum and must look for ways, such as summer stipends, post-law school fellowships, and loan forgiveness programs, to encourage more law students to pursue careers in public interest law. All law students, whatever their field of practice, should graduate believing that they have the duty to do pro bono work and use their training to improve society.

Hmmmm…. damn law school deans trying to improve society….

Dave Hoffman seems to do a better job explaining it at Concurring Opinions, contending that

The big idea to agree with here is that it is a terrible fact that law deans, and law professors, continually push out the message that corporate lawyering is a less moral & desirable career path than “public interest” lawyering.

Hoffman goes on to offer up some moral implications, but I would argue that the more pertinent question is why we assume that public interest practice (this is a misnomer, IMHO) is somehow immune or unresponsive to the market mechanisms that operate in corporate law land. There is a high degree of market failure in these cases, I’ll grant, but this is not an insurmountable economic problem. Becoming a corporate lawyer is one way to attack that problem, though a lot of people don’t have that long to wait for the benefits to trickle on down. The work of Muhammad Yunus with the Grameen Bank offers a more useful model.

Lawyers representing people in ‘public interest’-type cases need to get a long tail by which I mean a particular method of economic pie-expansion, the biggest hurdle to which I believe lies in the rules governing lawyers in structural and billing practices. I’m working on a business plan relevant to this subject in an Entrepreneurship class I’m taking right now. I’ll post it after I, well, after I actually get around to writing it, and we’ll see where this conversation goes.

The Death of the Billable Hour, Wishing Does Not Make it So

Scott Turow notes that “[f]or too many litigators, our life increasingly is a highly paid serfdom—a cage of relentless hours, ruthless opponents, constant deadlines and merciless inefficiencies.” His culprit? The Billable Hour.

When I left the government for private practice in 1986, the hours expectation for young lawyers was 1,750-1,800 hours a year in the large Chicago firms. Today it’s 2,000-2,100—even 2,200 hours. And the only real outer boundary is that there are 24 hours in a day—and 168 in a week. Increasingly, if we allow time for trivialities like eating, sleeping and loving other people, it is clear, as a simple matter of arithmetic, that we are getting close to the absolute limit of how far this system can take us economically.

The death of the billable hour is of course, prematurely heralded. Even Turow does not seem to think the billable hour is disappearing any time soon. Rather than predicting its demise in the article, he concludes by merely wishing it would go away.

Scott Turow: The Billable Hour Must Die

The issue is one of incentives. While the client’s interest is in keeping costs as low as possible while still ‘winning,’ and the lawyer’s responsibility is to act in the interests of the client, the billable hour upends this little economic ecosystem. The lawyer – economically rational, rent-seeking, profit-maximizing mercenary that he is – has an incentive to bill as many hours as he can get away with. Clients are savvy enough to recognize the disconnect and billing becomes a source of suspicion and at times, contention in the attorney-client relationship.

So if we’re not counting off the hours of the day in sixths, how will we get paid? Ay, there’s the rub. Turow mentions one alternative, the “fair fee method” which is described as by a practitioner as “We do the work, and at the end we get together and agree about what’s a fair fee.” Gee, I can’t imagine any dispute would arise out of that arrangement. Hire that guy to write all my contracts. Turow does not seem to do more than sip from this kool-aid either, but neither does he make any other suggested alternatives. He hopes merely that somehow, we’ll figure out a way.

Some interesting responses from Daniel Solove at Concurring Opinions, Scott Greenfield at Simple Justice, David Giacalone at f/k/a, Carolyn Elefant at My Shingle.

Law Grads Gush Over Prospects as Landmen

Texas Lawyer: Law Grads Gush Over Prospects as Landmen

A number of big energy companies recently began to recruit at Texas law schools to fill landman jobs, which involve title searches and contract negotiations. “It’s becoming a very hot job,” says Rhonda Vickers Beassie, assistant dean of career development at the University of Houston Law Center. Beassie says Exxon Mobil Corp. of Irving, Texas, and British company BP, which has its exploration headquarters in Houston, are recruiting for landmen at the law center.

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